Fort Morgan Breaking News, Sports, Weather, Traffic

2014 insurance cost increases = other Fort Morgan city budget cuts

Accountability likely coming for city employees on wellness

The Fort Morgan City Council heard last Tuesday that more work needs to be done to figure out how to structure health insurance for city employees to keep it affordable for the city.

Human Resources/Risk Management Director Michael Boyer and City Manager Jeff Wells went over the issues related to the Self Insurance Fund as part of planning for doing the 2014 city budget.

The Self Insurance Fund deals with property and casualty insurance, as well as health insurance.

"We pilfer the other funds for money for this fund," Boyer said.

He told the council that the city is "doing fine" on the property and casualty part of the Self Insurance Fund, which at $616,746 accounts for a much smaller chunk than the $2.28 million cost of health, life and disability insurance for employees.

"It's the health piece that we're seeing some concerns," Boyer said.

Yet, he said the fund is "doing pretty well" this year, thanks to investments in a money market account that netted about $500,000.

However, things in that fund can change pretty quickly, depending on what claims come in.

"We never anticipate what claims are going to do," Boyer told the council.

He said that while health insurance is offered to all full-time employees, not all take it.

And about four months into the year, the city was running about $80,000 short in the fund, Boyer said.

"Last year at this time we were doing much better," he said.

Advertisement

"This year, we've had specifically three high-dollar clams that ate up 16 percent of total costs. We're seeing a lot of high-cost claimants driving the costs."

But Wells pointed out that the city is "seeing some good things" in this area, as well, including fewer worker's comp claims lately.

Still, Boyer said he wanted the council to be aware of what was going on.

"At the end of the day, I'm not too worried, but I did want to give you the facts as they're staring us in the face," he said.

Some of the upcoming issues, he said, are related to the full implementation of the Affordable Care Act, aka Obamacare.

Those include the elimination of limits on coverage of pre-existing conditions and on amounts of annual or lifetime coverage.

Boyer said that the individual mandate that is part of Obamacare was intended to make sure that it was healthy people were coming onto insurance rolls, not just sick ones.

He also pointed out that he expected a need for "some fees" to be added to health insurance plans, including what he called a "per belly button fee."

Boyer said he expected costs to rise about 32 percent with the changes starting in 2014.

But Boyer said that one thing the city could do was to beef up its wellness plan to combat health risks and disease treatment that drive up costs.

He said he had been talking with staff at Colorado Plains Medical Center about how to make the city's wellness program more effective.

"We could save the plan some money there," he said.

But he said this was still a work in progress that he would bring back to the council in August.

Wells pointed out that part of the wellness plan needed to be getting people to deal with their unhealthy habits.

"Forty percent of all treatable diseases are related to habits," he said, adding that about 30 percent of such diseases were genetic.

Wells said that there were "three areas where we can address costs related to health care."

Those include premiums, wellness and deductibles.

Currently, the employees do not pay the premiums for themselves or their families out of pocket, and the participation in the wellness plan currently is not a requirement, so these are things that could change some for 2014.

"We're trying to tailor a benefit that really works for the employees," Wells said, adding that the idea was to figure out how to "provide the best plan at the least cost."

Boyer said that one of the next steps might be adding accountability to the wellness plan so that people have an incentive to take steps to improve their health.

Mayor Terry McAlister said he liked the idea of holding employees accountable for their participation in the wellness plan before having employees pay part of the costs of premiums.

"It's pretty easy to find out if people have a check-up through their insurance claims," the mayor said.

He also suggested potentially trimming the vision or dental benefits as a potential way to save money.

But Boyer said that likely would be counterproductive on the wellness side of things.

Wells pointed out that the best way to get everyone involved in the wellness plan likely would be adding a fee for nonparticipation.

"Most of us, and I'm one, if we can avoid going to the doctor to find out what's wrong with us, we will," he said.

Other possibilities include adding a co-insurance charge for spouses, especially if they have another option for insurance through a separate employer, or adding a charge for continued tobacco use without participation in a program to quit smoking or chewing.

"Ultimately, people have their choices and their decisions to make about their own health," Wells said.

But he pointed out that there likely would be about $300,000 in extra costs for insurance next year that would need to be spread out across all the departments.

McAlister wanted to make sure that would not be charged directly to employees, which Wells said it would not.

"I consider our strongest backbone to be our employees," the mayor said, adding that he learned from a recent survey of city employees that one of the most important things to them was the city's health insurance plan.

"If we can find $100,000 for a band shell, we can find $100,000 for employees," McAlister said. "We need to invest in our employees."

But he told Wells and Boyer that he thought they were on the right track in going for accountability in the wellness program.

"It's not foolproof. We all break," the mayor said. "But it really helps if we can hold them accountable. It's really hard for me to understand why everyone wouldn't go to the doctor for a free checkup."

Wells echoed the mayor's emphasis on the importance of the employees.

"Our employees are our most expensive but most important asset," he said. "We're not in a position where we need to make a knee-jerk reaction. We'll look and see how to make it work in the budget."

He said that the city had had no worker's comp claims in May, which was the first time that had happened in a long time.

But the city had been focusing on safety and being responsible, which may have helped with this, he said.

"If we put that same focus on (health care), we can make it happen," he said of encouraging employees to make healthy choices and take care of themselves, which could lead to cost savings for the city on insurance claims.

ODESSA, Texas (AP) — A West Texas man has been charged with impersonating an officer by using sirens and flashing lights to skip to the head of the drive-thru line at a fast-food restaurant. Full Story

Sufjan Stevens, "Carrie & Lowell" (Asthmatic Kitty) Plucked strings and pulsing keyboards dominate the distinctive arrangements on Sufjan Stevens' latest album, and in the absence of a rhythm section, they serve to keep time. Full Story